What Happens to Medical Bills When You Die in Georgia?

When a loved one dies after an illness that requires lengthy health care, the unpaid medical bills can be huge. What happens to medical bills when you die? Do medical debts die with you? These are common questions our office receives and often concern family members of a deceased person.

In Georgia, many people may believe they are legally obligated to pay a deceased person’s medical creditors. 

This blog post explains what Georgia probate law says on this point and the possible exceptions.

If someone dies in the hospital, who pays? 

Generally speaking, Georgia probate law states that only the deceased’s estate is responsible for the decedent’s unpaid medical bills.

Debts typically go unpaid if the estate has insufficient funds or assets. That means surviving spouses are usually not required to cover the deceased person’s medical debt, though there are exceptions. 

The most significant way a surviving spouse can be responsible for the medical bills after someone dies is if they signed a document at the hospital accepting responsibility for them.

Often, family members aren’t even aware of what they signed up for when their loved one was hospitalized, so they often don’t know if they agreed to pay for the medical care.

Therefore, it is worth investigating the signed documents to determine whether you are liable.

If you accept responsibility for the bills, the medical provider can personally pursue you to collect them, as if you were the patient.

A far more common way that the family is affected by the deceased’s unpaid medical debt has to do with the probate estate itself and the way the property is held (more on that below). 

What Happens to Medical Bills When You Die in Georgia? Can Family Members Be Held Responsible? 

If someone dies in the hospital, who pays the bill, who is responsible for hospital bills after death? That depends on many factors, including the Georgia law on paying medical bills.

When someone passes away, they can leave an inheritance, which generally includes all the assets and money they owned at the time of death. If the deceased person had unpaid bills, these would be paid from their estate, either through bank accounts they held or by selling their assets.

Typically, two situations can occur: 

When there is a solvent estate 

When there is a testament, an executor (someone designated in the deceased’s will to handle their affairs) will be responsible for ensuring the bills get paid out of the late spouse’s estate. If a person dies without a will, the probate court may appoint an administrator or another person to serve as executor.

Once the court has designated a personal representative, he must run a debtor/creditor ad in the newspaper for four concurrent weeks to inform creditors that the estate has been opened.

In Georgia, a system dictates which debt you should pay first. It ranges from 1-8, with 1 being the first creditor to pay and 8 the last.

The executor must prioritize the payment of the debts according to the state probate laws:

1. Year’s support: this claim is only available to a surviving spouse or a minor child. A family member should file a petition against the estate within two years of death.
2. Funeral expenses: under state law, the deceased person’s assets may reimburse reasonable costs related to the decedent’s funeral or cremation.
3. Administration fees are associated with settling the estate and can include court and legal fees.
4. Expenses of final illness: all costs for medical treatment related to the final illness will fall into this category.
5. Taxes: state or federal taxes and other obligations owed to the government are included here.
6. Secured creditors: secured debts allow companies to take specific property when the decedent has no means to pay debts. An example would be a mortgage or car loans.
7. Unsecured creditors: unsecured debts that don’t fit into the above categories, such as credit card debt, a spouse’s medical bills, or medical expenses not associated with the patient’s terminal condition.
8. Heirs/beneficiaries: after clearing all outstanding debts, the personal representative distributes the remaining assets to the late person’s heirs and beneficiaries.

The executor or administrator may be compelled to pay out of their own funds if they don’t follow the creditor list correctly. 

When there is an insolvent estate 

When they believe they can reasonably claim assets (e.g., property, money) in the deceased’s estate, debt collectors can try to force the opening of probate.

They can also place liens on assets in the deceased’s name to collect the person’s debts once that asset is liquidated. They can only attempt to recover what they are owed from probate assets. 

The law prioritizes using the late person’s assets to pay their debts. If you have no liquid assets, you may be required to sell real estate or other property to satisfy creditors. The estate may be considered insolvent if there aren’t enough assets to cover the deceased person’s debts. 

The heirs and beneficiaries will not be responsible for settling these debts, but this also means they won’t receive any inheritance from the estate.

Assets transferred outside of the decedent’s probate estate are not reachable by creditors 

Some assets may name designated beneficiaries listed on them before the deceased passed away, negating the need for a will or the formal probate process to transfer the asset. These are often described as non-probate assets.

The probate court process or the will does not govern them, and they are not subject to creditors’ claims. This means a creditor cannot force the recipient to use non-probate assets to pay an estate debt.

Is a Spouse Responsible for Medical Bills after Death in Georgia?

 

No, unless they signed documents agreeing to cover medical debt or otherwise accept financial responsibility for the late person’s medical debt. 

Georgia probate law generally states that only the deceased’s estate is responsible for the decedent’s bills, not the surviving spouse.

Once someone dies, all their property, other than joint or beneficiary-designated accounts, becomes available to creditors through the probate process to pay debts owed by the deceased.

As a result, if the late person owned the family home and the surviving spouse was not a joint owner, then the hospital and other creditors can force it to be sold to pay their debts. The same principle applies to bank accounts, vehicles, investment accounts, and any other property that goes into the estate.

Georgia probate law provides surviving spouses a spousal support option called year’s support. It gives them a higher priority than creditors, so they get paid first. Year’s support is a complicated process, and you only get one shot to get it right, so we strongly recommend hiring a qualified probate law firm to assist you. 

Is a Child Responsible for a Deceased Parent’s Medical Bills?

As a rule, all unpaid debts should be collected from the deceased’s assets before the heirs receive their share. If there isn’t enough money to cover financial claims, creditors may look for someone else to pay the bills. But, in most cases, no one is legally obligated to use their own money to pay off a deceased person’s debts.

Although family members are typically not responsible for their loved one’s debts, they can also be liable if: 

• They co-signed for the debt, such as a loan.
• They’re joint account holders on a credit card account. This would make the joint holder personally responsible for paying off any balance.
• The deceased person was their spouse, and they live in a community property state — or the decedent was their parent, and state law requires them to pay a certain kind of debt, such as medical treatment and nursing home bills.
• They were the estate’s administrator or executor, but they didn’t follow Georgia probate law.

Can an Estate Plan Protect Your Family?

Estate planning in Georgia helps to accomplish several important purposes. It allows individuals to protect their assets, plan for the distribution of their estate after death, appoint guardians for minor children, and ensure their wishes regarding medical decisions and end-of-life care are followed.

However, as it is a very complex process, we strongly recommend consulting an experienced estate planning lawyer.

Dealing With Debt Collectors After a Family Member’s Death

After a person dies, the personal representative should run a creditors’ and debtors’ ad in the local newspaper for 4 consecutive weeks. Once the ad has run, they must keep the estate open in probate court for at least 3 months to allow creditors to file their claims.

Anyone with a demand can directly contact the executor or administrator or submit it through the probate court.

Creditors can file their claims as long as the estate is open and before their applicable statute of limitations expires.

If you believe the request is invalid, you may have the opportunity to dispute it. The disagreement can be brought to court before a final decision is made on whether to pay the person or entity.

What’s Next?

Medical debt doesn’t disappear when someone passes away. In most cases, the deceased person’s estate is responsible for paying any debt left behind, including medical bills. Usually, the deceased debts will be paid out of the person’s estate. But if the decedent didn’t leave sufficient assets to cover all their debts, creditors may look for someone else to pay.

If a debt collector contacts you about your late loved one’s medical debt, it’s important to know your rights and responsibilities.

Do you still have unanswered questions? Call us at (770) 796-4582, or use the form and set up your consultation to talk with one of our experienced probate attorneys.